We use cookies to customise content for your subscription and for analytics.If you continue to browse Lexology, we will assume that you are happy to receive all our cookies. For further information please read our Cookie Policy.

Belgium - Employer Update 2017

The government intends to allow employers and employees to organise their relationships with more flexibility. The legislation is still in draft form but the most significant proposals relate to:

The calculation of the average working time (38 hours/week) on an annual basis for all sectors;

The opportunity for employees to choose to perform overtime;

Incentives for offering training to employees;

Occasional telework and the opportunity for employees to work from home.

In addition to these measures, other sector-specific reforms are anticipated, such as a global reform of working time, the possibility to introduce flexible work arrangements, and the creation of career-investment accounts in order to finance future career breaks or to help employees with personal issues.

Students at work

The applicable rate of social security contributions to be paid for the employment of students is lower than the standard rate if the students are employed for a limited period of time.

The maximum annual limit (as of 1 January 2017) will be 475 hours per year per student (instead of 50 days per year as previously applicable). This will allow more flexibility to students and their employers.

Evolution of salaries

At the time of writing, no decisions have been made regarding a possible (limited) salary freeze for the period 2017-2018. Following the latest communications from the government, the sanctions in cases of infringement of the salary freeze should be strengthened and the decision-making process leading to establishment of a salary freeze modified in the future.

A proposal to amend the current legislation regarding collective dismissals

The government is considering amendments to the existing legislation regarding collective dismissals. The reform will focus on mediation and modify the current process.

KEY DEVELOPMENTS FOR 2016

Tax shift: reduction of the social contributions to a basic rate of 25% and preferential treatment for the first six employees

The government intends to reduce employers’ social contributions from a 32.4% basic rate to a rate of 30% by 2016 and of 25% by 2018. In addition, it aims offer lower rate of social contributions for the first six employees of a company. This measure takes place in the framework of a global tax shift in order to improve the competitiveness of the Belgian employment market.

Important modifications concerning supplementary pensions

There have been three important changes:

The rate of the guaranteed return of employers will be lowered to 1.75% for 2016 and 2017 and adjusted in the future by reference to the economic index;

Where an employee exits a supplementary pension scheme, the employee will keep the right to choose life assurance ; and

As a general rule, supplementary pensions will only be paid on the statutory retirement age.

Systematic withholding of four weeks’ pay in lieu of notice by the employer to finance outplacement

As of 1 January 2016, employers are entitled to withhold four weeks’ payment in lieu of notice in order to finance outplacement for those employees dismissed with immediate effect if the employees are entitled to an indemnity of at least 30 weeks of remuneration. Since 2016, an employee has been able to refuse the offer of outplacement but the employer will not have to pay the complete indemnity in lieu.

The payment of salary cash in hand is forbidden

The payment of salaries by bank transfer was made mandatory on 1 October 2016.

Increase of the employer’s social contributions for unemployment benefit

In order to discourage early retirement, the employer social contributions has increased by 2.25% for the market-sector and by 1.25% for the non-market sector. This system allows dismissed senior employees to retire from the employment market with the benefit of an unemployment allowance together with an additional contribution from their former employer.

With thanks to Kris De Schutter and Vincent Marcelle of Loyens & Loeff for their invaluable collaboration on this update.